SECTION 6. DOCUMENTATION

.01 The taxpayer must maintain and make available to the Service upon request documentation of the business processes that:

(1) create the retained records; (2) modify and maintain its records; (3) satisfy the requirement of section 5.01(2) of this revenue procedure to support and verify entries made on the tax

create files solely for the use of the Service. For example, a taxpayer that uses a DBMS may satisfy the provisions of this revenue procedure by creating and retaining a sequential file that contains the transaction-level detail from the DBMS and otherwise meets the requirements of this revenue procedure.

(2) A taxpayer that creates a file described in section 5.02(1) of this revenue procedure must document the process that created the sequential file in order to establish the relationship between the file created and the original DBMS records.

payer’s return and determine the correct tax liability; and

(4) evidence the authenticity and integrity of the taxpayer’s records.

.02 The documentation described in section 6.01 of this revenue procedure must be sufficiently detailed to identify:

(1) the functions being performed as they relate to the flow of data through the system;

(2) the internal controls used to ensure accurate and reliable processing;

(3) the internal controls used to prevent the unauthorized addition, alteration, or deletion of retained records; and

(4) the charts of accounts and detailed account descriptions.

.03 With respect to each file that is retained, the taxpayer must maintain, and make available to the Service upon request, documentation of:

(1) record formats or layouts; (2) field definitions (including the meaning of all “codes” used to represent information);

(3) file descriptions ( e.g., data set name);

(4) evidence that periodic checks (described in section 9.01(3) of this revenue procedure) of the retained records were performed to meet section 9.02(1) of this revenue procedure, if the taxpayer wants to take advantage of section 9.02 of this revenue procedure;

(5) evidence that the retained records reconcile to the taxpayer’s books; and

(6) evidence that the retained records reconcile to the taxpayer’s tax return.

.04 The system documentation must include any changes to the items specified in sections 6.01, 6.02, and 6.03 of this revenue procedure and the dates these changes are implemented.